Passive currency hedging aims to reduce or eliminate currency risk arising from exposure to international assets.
- Advise on hedging policies that address client risk appetite and portfolio structure.
- Set up efficient operational workflows using proprietary systems.
- Provide transparent and efficient execution through a panel of approved counterparties.
- Manage cash flows and oversee collateral requirements.
- Avoid cash drag, including by using equitisation strategies
- Currency exposures are monitored and managed.
- Operational efficiency is achieved through optimising the execution process and managing settlement and reconciliation with custodian banks and/or prime brokers.
- The volatility of returns in portfolios exposed to international assets is reduced.
- Best execution is achieved through access to a curated panel of counterparties.
See more articles: https://www.millenniumglobal.com/studies/passive-currency-hedging
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